Determining Income from Assets

Note: For families receiving only BMIR assistance, it is not necessary to determine whether family assets exceed $5,000. The rule for imputing income from assets does not apply to the BMIR program.

HUD Occupancy Handbook Chapter 5: Determining Income & Calculating Rent

6/07

5-23

Section 1: Determining Annual Income

4350.3 REV-1

1. The calculation to determine the amount of income from assets to include in annual income considers both of the following:

   • a. The total cash value of the family’s assets; and

   • b. The amount of income those assets are earning or could earn.

2. The rule for calculating income from assets differs depending on whether the total cash value of family assets is $5,000 or less, or is more than $5,000.

• C. Determining the Total Cash Value of Family Assets

  1. To comply with the rule for determining the amount of income from assets, it is necessary to first determine whether the total “cash value” of family assets exceeds $5,000.

     • a. The “cash value” of an asset is the market value less reasonable expenses that would be incurred in selling or converting the asset to cash, such as the following:

       • (1) Penalties for premature withdrawal;

       • (2) Broker and legal fees; and

       • (3) Settlement costs for real estate transactions.

The cash value is the amount the family could actually receive in cash, if the family converted an asset to cash.